Michigan Physician Nursing Home Fraud: Bills for Visits Never Made

A Michigan osteopathic physician agreed to pay $2 million in a nursing home fraud case over allegations that he billed Medicare and Medicaid for visits he never made, unnecessary services and exaggerated complexity, and certified ineligible hospice patients. The Justice Department’s announcement connected the physician and a corporation he controlled to the alleged overcharges. For someone who knows what happened at the bedside and what appeared on the bill, the case separates questions that billing paperwork can blur together: whether care happened, whether the patient needed it and whether the claim described it honestly.

The civil allegations concerned services for nursing-home and hospice patients in the Detroit area from 1992 through 1996. The alleged bills charged taxpayer-funded programs for visits residents never received.

What the Government Alleged About Nursing-Home Visits

The government alleged that the physician knowingly billed Medicare and Medicaid for services he had never provided.

The Justice Department also alleged services that were not medically necessary and services billed with exaggerated complexity.

The financial incentive was already familiar in that period. The California Research Bureau’s November 1997 report, Fraud and Abuse in the Health Care Market of California, explained how fee-for-service income depends on the frequency and type of services billed. The report identified an incentive to schedule more examinations than medically necessary.

In the Michigan case, the alleged overcharges reached each of those payment decisions. A visit could generate money without happening, an unnecessary service could generate another bill, and an exaggerated description could increase what the payer was asked to pay.

What Evidence Is Needed to Prove Fraud?

For nursing-home visit billing, we compare the encounter, the clinical notes and the submitted claim, including who supplied the service and who controlled its description. The useful connection is between what happened to the resident and what Medicare or Medicaid was told happened.

A visit allegation calls for the records of the encounter and the practitioner’s presence. A necessity allegation calls for the patient’s condition, the reason for the service and the care actually delivered. An exaggerated-complexity allegation calls for the clinical account alongside the billed service level. These are the comparisons we make with an insider who understands the care or the billing. Each addresses a different way that the claim can depart from the underlying work.

That distinction also makes the path from chart to claim worth examining. In a later case involving KareFirst, the government alleged that proprietary charting software automatically raised codes for subsequent nursing-home visits. The settlement announced in June 2024 put the conversion from a visit record to a billing code at the center of the allegations.

For a billing employee, that means the original chart, coding changes and submitted claim can tell different parts of the story. For clinical staff, the contemporaneous account of the resident’s care supplies the comparison. We connect those records to the people who made or controlled the billing decisions.

Physician Claims in Their Payment Era

The Michigan allegations predated Medicare’s prospective payment system for skilled nursing facilities. That system began with cost-reporting periods starting July 1, 1998.

Medicare pays the facility for a bundle that includes room, board, nursing, therapy, drugs, laboratory services and supplies. The facility then pays outside suppliers according to their contracts. Moving a resident offsite for a bundled service does not itself make a separate claim payable. That gives the billing team a different problem to spot from the physician’s alleged invented visits: charging separately for care already in the facility’s payment.

The distinction between the facility and the practitioner still matters. Under the later consolidated-billing system, physicians’ professional services can be paid separately from the facility’s bundled claim, as CMS explains.

Hospice Eligibility Is a Separate Payment Question

The Justice Department also alleged that the physician knowingly signed off on hospice care for patients who did not qualify for Medicare or Medicaid services. That allegation concerns the certification supporting access to paid hospice care. It asks a different question from whether a nursing-home visit happened or how much work the physician performed during it.

For an insider with knowledge of a certification, the connection runs from the patient’s clinical condition to what the physician certified and the care billed on that basis. We examine the clinical support and the certification together. The signature is one part of the story. The patient’s condition is the substance behind it.

The separate billing responsibilities become clearer in the American Senior Communities case. In its August 2022 settlement, the government alleged that the nursing-home operator billed Medicare separately for therapy that should have been covered by residents’ hospice benefits. A former employee of a hospice company doing business with the operator brought the whistleblower case.

The Michigan allegation challenged patients’ eligibility for hospice services. The American Senior Communities allegation challenged separate therapy bills for patients receiving hospice care. Both turn on what the payer was told, but they call for different comparisons: clinical condition against certification in one, and hospice coverage against the facility’s therapy claim in the other. Someone working across the hospice and nursing home may see the connection that either provider’s bill leaves out.

The Nursing Home Fraud Case and Whistleblower Rewards

The Justice Department announced the Michigan civil settlement on December 27, 2000.

For an insider considering a separate case, a whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When the Visit and the Bill Tell Different Stories

If you know that a visit never happened, a service level changed on its way to billing or a hospice certification contradicted the clinical picture, speak to one of our whistleblower experts about what you saw. We develop the case with you and bring in health care fraud whistleblower lawyers who understand physician billing and hospice eligibility. We stay beside you to build your strongest physician-billing or hospice whistleblower case.